Investing and Helping Companies in Their Earliest Stage with Tyson McDowell of Greatscale Ventures

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech and tacos, Tacos and tech you know we got tacos and tech is on smash border green guacamole keeper captains counting beans Contador quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times a crappy my coding yoga posse fold the body origami we be surfing coronado eating tacos el gordo, the taco standing puesto lucha libre and sombrero got a shout out to cost angels by the ocean watch the sunset la Jolla shores Entrepreneurs trying to get funded when San Diego Startup Week is popping in the summer Oceanside, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach Tech leaders believe stars are within reach we interview and founders who be shooting for the moon SD Tecos with your host, Neil Bloom.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

Welcome to the Tacos and Tech Podcast. I'm your host, Neil Bloom, and I'm thrilled to have you here. On the Tacos and Tech podcast, we interview builders of technologies, of companies, of communities, and we do it weekly, so thanks for tuning in. Every Tuesday, a new interview. And on Fridays we talk about what's new in the San Diego tech ecosystem from a news perspective. So make sure you join us there as well too. We also have a tech newsletter that comes out every other week@freshbroodtech.com you can subscribe to listen to it without further ado. Enjoy this episode. I am thrilled to have Tyson McDowell, managing partner of Great Scale Ventures. Hey, Tyson.

Hey, Neil. How are you? It's good to see you.

You too. Yeah, see here our listeners are hearing us. It's really nice to have you on the podcast. We've been kind of floating around each other for a while. In the community, we tend to see each other at Jason Knapp's backyard. Seems to be where we catch up. But I'm really excited to let the world know what Greatscale's been up to because you guys have been incubating a bunch of good companies. You want to give us a quick one minute overview of what Greatscale Ventures is doing?

Yeah, sure. So, great scale. My partner Aaron and I. He's out. He went to D.C. this week on vacation to Run for president. Vote for Aaron. Now he's not really running for president. We are both kind of entrepreneurs turned venture capitalists that can't help but be entrepreneurs. So great scale, writes the very first check and continues to write checks through the life of the company and will lead all the way up to series A. We believe very strongly that having consistent source of capital as a company iterates and pivots and learns its market fit is critical in the first four years. And we also perform technical help as a, you know, we're a, we're a fractional executive participant at the technical level with ctoship as well as strategy and some like CRO like activities. So we lean in hard to. Our companies are kind of boutique. Absolutely love our founders. Our focus is minority stakes and be as much a co founder as we can be in their shoes with them. So that this journey of growing, starting and growing a company can be fun and fulfilling and they actually end up large on the cap table at the end of it, which is a rare thing. So we're super focused on building companies that entrepreneurs and employees can love being a part of from day zero all the way to the end and make sure they get the spoils of that effort.

That's awesome. It's such a great, great resource and asset to be helping our companies along. And we know it's very fulfilling obviously as well too. Right. We've both built companies, we know how hard it is and lonely. But to have a partner that really knows it and can help you along, super, super fulfilling. So we're going to talk deep about that and kind of how you came to this thesis, but tell us how you got here. Like obviously you, you have learned some things to know how to build what you want in this box. Where are you from originally and how'd you get into tech?

I'm from originally. I was born in east la, which is a movie, so that was great. And did elementary school in Lompoc, California, where there's a supermax prison, an air force base, they launch nuclear missiles and there's a diatomaceous earth plant and it was the number one producer of flower seeds for a lot of years for show flowers.

I know Vandenberg very well.

Yeah. So Lompoc is known for its missile explosions with hydrazine, its bad allergies and prison breaks.

A great place to grow up.

Yeah, it was awesome. I had both grandparents within a mile and I could go home and make my bed or I can go get candy and make money mowing my grandma's lawn. So it was. Yeah, I mowed a lawn a lot.

Saw a lot of rocket launches though too, which is like.

Oh, yeah.

Kind of life changing as well.

Very life changing. I'm an aviation person. I'm a pilot and vice chair of the Air and Space Museum here in San Diego, largely because of the Air Force aircraft and the rockets all throughout growing up, really, really cool stuff. And then are you to get into.

Tech or what kind of point did you.

Absolutely. Aviation is everything. As a little kid, I was doing flight simulator on the computer. 286, 386 computer had to push the computer to the limit so that the flight sim would have a good frame rate. Kind of learned about some programming from that. It's not really programming, but just computer stuff. And then we. I went to middle school in Seattle at Redmond, right next to Microsoft. And the middle school had a program to write websites and do Microsoft networking for the school as a tech intern. There were three of us in middle school.

That's crazy.

Middle school. Yeah, it was a pilot program. I think Microsoft realized in the 90s that in the 80s the Apple won the heart of all the elementary school kids. And so they were trying to play catch up, but they taught me HTML 1.0 and how to write websites. And so I worked on the school website, which was a new thing at the time, in 1993, I think, and started learning to fly as well. When I was up there, I was kind of doing computer tech support and got paid a little bit of money and some other stuff. Used that to learn to fly. Always wanted to fly, quickly ran out of money. My parents funded the flying for a while, but when we moved to San Diego when I was 14, went to high school, I did the Torrey Pines High School website. We did some work on the attendance system, kind of kept going with that tech thing and started building websites professionally when I was 14 to pay for airplanes. And it's always been that it's just like do tech to pay for flying, new tech to fly when I'm not flying because I'm a kid and I can't do that. So hugely. What was that?

Still that way, right? Everything to fund your flying habit.

Well, it was up until 2012 and one of the things that really kind of happened, I was framed very early into, oh man, you're going to be Bill Gates. And then, oh man, you're going to be Mark Zuckerberg. And then, oh man, you're going to be Elon Musk. Proud parents, proud friends. No, I'M not. But it sure seemed like everyone thought I should and so. And I'm not. So by financial success, by reach, by any of it. So that was a pretty big set of shoes to fill and I didn't fill them. So I was always chasing this sort of financial success, then play sort of thing, financial success, then do fulfillment thing. And so the tech was in service to paying to fly. And the first company we did, we started just right as I graduated high school. It ended up in healthcare finance, was called Benchmark Revenue Management and then became Avidyne Health. And then we sold that to private equity in 2016. So I was left high school, started a company, wrote software to make hospitals efficient at collecting money, ran the company, did a merger with a collection agency on leverage buyout model, learned about that, that's just a different way of financing things. And then sold that to private equity buyers and had an exit. And by the time we exited, I was 33 years old. And that was the first time that I was like, well a. That was a lot of journey. I didn't make Elon Musk money or Bill Gates money. The journey wasn't all that fun. I really felt like I was making money to get rich, to then do something fulfilling. And I burned out a lot of relationships. I was a very still am, but I'm trying to, I'm trying to get better. A very aggressive leader. Whereas like everything is urgent and everything is critical and I burn people out. And I flew a lot. But I just, I was like, man, is this what it's all about? And during the second half of my time with my company, you know, we started in making hospitals efficient at collecting money with software in the US and that, that's a hard business. A hospital would pay us a quarter to half million dollars a year in fees for the software that would make them decide who to call about money better. And every year we had to justify ourselves. We were making them money hand over fist. They were saving literally tens of millions of dollars and we'd have to struggle for this quarter million, half million dollar fee. And there aren't very many hospitals and they take 27 months to sell to. So our average sales cycle was 27 months after, I don't know, 30 or 40 deals throughout the life of the company. And then I noticed that. So our software's supposed to make it to where you get all the money that should be there. And you don't call the people that will never give you the money. Our hospitals wouldn't use it. Right. And they would just then hire a bad debt collector to go collect the money and pay them $10 million in fees. So we thought, well, let's just merge with the collectors and we'll make all that money and our software will make us more efficient as collectors and improve patient satisfaction. And that last part is when the heart started to finally warm up. We use algorithms to choose who to call and why. And the opportunity to reduce a patient's pain, where they get saved and then they get a call from a collection agency 60 days later and they're terrified they're going to go bankrupt is an awful thing. And we know for sure that we've avoided that feeling for people in recovery to the tune of, I mean, probably thousands and thousands of material examples a year where that was like the situation. So we really became the patient satisfaction company by being, by treating people with respect around money and being sensitive to their pain. And that was. That felt good. It finally felt good, but it's felt small. It was like an enormous amount of effort, an enormous amount of engineering and team and sales effort to produce this kind of edge case of value to humanity. And so I was like, I don't want to do that again. I want to work only on high value humanity stuff, but I want to use tech to do it. Because the other part that happened was my part. Facebook happened and then Instagram happened and the coolest stuff in the world turned out to be making little kids think that they should kill themselves and caused cyber fights and crap like, and bad information and this. It's, and it's getting worse. So I didn't feel like I was credible at anything. I had no college degree, but I knew some AI stuff. So I did a TED talk on how can you take the techniques of social media and recommendation engines and turn them to good for humanity and wrap up business around it, a for profit business around it. And that came out in 2018 and went well at TEDx Santa Barbara. Shout out TEDx Santa Barbara, get good people. And then we founded Great Scale around those principles. So that talk for me, my partner came at it from a little bit of a different angle. Aaron did. But for me, Great Scale is the embodiment of that talk. If you're going to make unicorns out of tech companies with that kind of valuation, that kind of growth, those big values, why can't we be proud of how those companies treated their users? And why can't we be proud of the product that comes out? Why can't we be proud of the employee, employee culture? Why can't we be proud of the diverse careers that emerge from those companies? Because when you look at the unicorns minted in the last five years, that's. I don't. I can't think of too many that meet that criteria. So greatscale is building those principled high, like they're companies that are worth winning, unicorns worth being born using. I thought technology was the answer. I thought that modifying the algorithms was the answer. My partner, Aaron comes much more from. He came from Microsoft than he does philanthropy. And he kind of came out of retirement, if you will. And his focus was. No, no, Tyson. The perverse incentives of the way companies are owned, especially by venture capitalists, drive these great technologies to be used for this sort of lower purpose. And let's not do that. But we have to be venture capitalists to fix it. We have to be in the ownership stakeholdership to fix it. We can't fix it with the software. And so we do both.

Yep, that's a great premise. We're going to unpack it a little bit. But how'd you actually meet Aaron? Where. How far back do you guys go?

Yeah, we go back a long way. So I started doing. We started Benchmark, and it made money from day one. So the first six years were funded by revenue. It was boots called bootstrapping, I guess. And then we needed to grow, and the way that we got that revenue was through a consultancy partner called Navigant, who was great. But they got us going, and then they had an exclusive to selling to healthcare, and we wanted to grow faster than they could, so they were selling as much as they could, and we knew we could sell more. So we secured the right to also sell in the market and hire a sales team. And that's what we went out to get angel capital to do. And we went around to San Diego. We raised money from Tech Coast Angels and from Express Ventures and a smattering of individuals, and Aaron was one of those individuals. So Aaron wrote the single. Well, he wrote one of the largest checks by an individual angel that I've ever received in a company, and he attracted the largest one I ever received. So him and his small group contributed a lot of angel capital relative to everybody else in my first and second rounds. And he also just. He was just so helpful, both on technology, because I was also the cto, but just on how to think about the world, how to care about society. He said he has a psychology background and a social impact background and a technical background, and he's my mentor around how can I work for the rest of my life and be fulfilled? So when I sold Avidyne and he was kind of sort of retired, ish, I was asking him, how do we change the world and how do I change the world? And mainly it was let's get together and change the world on a company that wins financially when the world changes for the better.

Wow, that's pretty cool to team up together on that and be so mission driven with the capital as well too. I've got to imagine the idea changed a little bit eventually to what it actually came out to be.

Oh my gosh, so much. Yeah.

So that idea of changed the world with tech and capital to what it is to now. I'm guessing it iterated by actually going in and helping companies and being like, all right, we're actually good here, we're good there. Or take us through kind of the application.

Well, you know, it's funny, there's this thing called the pivot. Early stage companies pivot. Hey, did you pivot? Oh, we just pivoted. Is that bad? You know, I pitched you investor on shoes and I've pivoted to sustainable 3D printers. Is that bad? So sometimes pivoting feels like you were wrong and people are worried that ruins your credibility. Sometimes other people look at it. Elon Musk looks at pivoting as regular day of business stuff. Build a hypothesis, try it out, test it fast, couple weeks. If it's wrong, now you have information to make it better. So it's not pivoting, it's actually agile development, lean startup. There's all these words that, you know, people attack this from different angles. So we embrace that for our companies and we are very interested in every pivot. Pivoting up, ratcheting up. But also once something is learned, don't lose it. Compound positive learnings. So one of the things that happens, especially in early stage is people pitch something and they get stuck on the pitch and they're like, they struggle to. And then when they pivot, they like pivot everything. So we really try to look at what is objectively a spark that got lit. That's a fire that's going to grow, but it'll take time. And then what are the parts that you fall away and let's replace them with a new test. So that happened to us too, of course, as we did this and if we didn't just do it, just co found companies with great founders, people we thought was great. I'll be honest, like, people go like, are you any good at Picking. How did you know these founders are great. It turns out we gotta go with the ones that feel they're people that have mutual humility and a lot of bravado that give a crap about something that you could imagine giving a crap about when the chips are down. And so we got that part right. Being co founders, earning equity, revesting our own equity, those were moments where we were like, yeah, we want to do that. We want to be with you in your shoes. We are. I am. You. Like, we're a little bit more advantaged than our founders because we have some wealth behind us individually. But, you know, the more that we just accept not their burden, but they're. We're with them. That's been great. We could go into a lot of, like, technical details, but yes, the model's pivoted a lot in detail, but almost none by thesis.

My heart got it. Yeah. And that's so actually unique and rare to have first just capital that's coming from entrepreneurship. You know, a lot of capital is high net worth, but didn't make it in the same field that you're investing in. So already that is rare. And then to have the roll the sleeves, but also just the catharsis, like, hey, founder, we know it's lonely while you're doing these pivots and experiments. We've been there too, and let's sit down and do it with you. And I think sounds like you've built a model where you don't just write the check and say, let us know where you need help. It's, hey, let us know where we can. How long we can be on the ride with you too.

So here's one of the pivots. Like you could have been advising us in the early days. You call our CEOs and our co founders. It's not been an easy experience. The way that you phrased it is probably the way that we've come, that I've come to look at it and Aaron has always looked at it, but the way you phrase that was, hey, let us know how we can help. Especially with some of the history I told you, I think I come across and have come across to our founders, to our CEOs as do this, this is smart. And you're not, you know, and I'm coming in with love and giving help, but I'm treading on. I'm not explaining it to them, not setting their expectations, not preparing, preparing them for what's going to happen. So I think that they've been really on the journey with us to figure out how to thread just how to do this well because yeah so it hasn't been easy and I don't like our theory was that this would be fun but. And we know we're unique in a lot of ways and positive on paper but I can tell you that in the trenches, you know I think that we've been just as hard on our portfolio companies as they've been on us and I'm not sure. Well anyway, so it's kind of beautiful. I think that they'll be celebratory but you know just a little bit in the weeds. There is. Yeah, it's been hard. We really worked together and there's always there not fights but the co founder pressure is real for sure.

Yeah. And let's talk about some of the companies because there's some great ones especially ones that I've been have known for quite a while including Fulcrum. Is that your first company you started.

Helping or the order was Valve, Fulcrum and plus Music. And then we have a fourth one that we don't report out on to the world yet but that was. That's the order. But they all kind of happened at the same time. They were all within three months of each other. So we did kind of a first cohort if you will and to just get in there and do. We knew we wanted to create this kind of value but it's ironic the Great Scale name was intentionally ironic. We want to create impact at great scale. We want our tech companies to have 2 million people positively impacted through high scaling self sustainable technology business models not we want to have 100 companies. So we know that yeah we're and we know that we can't necessarily do a lot of them all the time and when we do a new one like this latest one there's a lot of. It's like all new team. We have more people on our team that do that one and that kind of thing. So it's not the most scalable model in the world in terms of venture capital execution goes but it's highly scalable for our LPs and for impact. So the first. The first three were very at the same time. Ish.

Okay, got it.

Fulcrum. So what's your question?

Well we love. We big fans of Trevor and Sean. SEAN also a TEDx worthy speaker. I don't know if he's given one before but just.

I don't. Yeah he is, he's. He's very. His relationship development abilities and his abilities to. To Relate in a conversation. Very, very good.

Yeah. And I think I got to know him in the talent world when I was building a talent company as well too. Either hired or portfolio, can't remember. But to see them come together, build it like. And I know, I think you've been there almost from the start. So take us through kind of what a journey give us. Let's use them as an example of kind of the journey and growth of a startup with you guys.

Yeah. So in Fulcrum's case, and in all, you know, and this is a lot of the cases before the company was even created, we were sitting there and talking. So Sean and I met out in the San Diego entrepreneurial ecosystem. He was talking about, they want to do this company. It's a tech company. It's about the gig economy at the time. I've got this partner, Trevor, and they were both working at another company and they were like, yeah, we're going to do the startup and our company's going to help us do it and they're going to like it. And in my head the alarm bells are going like, this is a complicated train. Wait, so you want to do a spin out and you want funding from a what? Like, wow, okay, well, have you done this before? No. Okay, well, you know, this is not. Oh, all right. Well, if you think that's going to happen. He's like, yeah, in like two months we're going to launch. It'd be great. I'm like, okay. And this is my first meeting with Sean. So Sean asked, he's like, can you just like give me advice as things unfold? And I asked, sure. So we had a couple conversations and then I asked to meet Trevor, who's his co, founder and CEO. This was again before the company was even invented. And we went to Snooze eatery over there at UTC and they were talking about like, yeah, they want to do the spin out. What would a spin out look like? So I threw out some terms of what a deal might look like just as advice. And then like, I don't know, it feels like it was a week later, maybe it was a couple of weeks later, I get this email from the guys. Well, it's done. We got our bank account and we're getting fired in two months and we're going to our own going away party and it's the founding party at the same time. I was like, what they went for where they went for what? You know, basically, literally, I think I was writing on almost a literal napkin some high Level terms that I thought might work. And they modified that and worked it and made the deal happen on their own. But I think they were emboldened by just some of the input and boy, it's a great deal. And then. And they were off to the races. Trying to get big companies like Fortune 1000 companies to embrace the gig economy, that was the theory and got really quickly. They got a lot of great logos to the table. They got like Kellogg Corporation cereal company. And every, every logo they've got now is customers. And they have, they have quite a few customers now. They all are big names, very innovative. And along the way it's been, how do we scale sales? What does an enterprise scale cycle really look like? How do we go from what they bought and why they bought, which is necessarily something tactical and like right now, to the vision that Fulcrum is painting for its future. And Fulcrum was founded on the principle, and this comes from the founders, and it's beautiful. There's a prosperous world for us all ahead, which is that we can basically do work that feels like fun. We get paid way more doing what we're good at and what we're passionate at. And if I could do just that 20 hours a week for seven or 10 different companies, I'm going to make way more money. I'm going to escalate in making more money per hour, a lot. And I'm going to have fun and have flexibility. I can live where I want, I can live in areas I can afford with people I like. So that was the vision, prosperity. And for the big companies, what they get is more talent, turning around, more precise work, faster, more access, more diversity, more performance, higher margin because they're buying fewer hours at a higher hourly rate. But they're getting the outcome. And they're not burning six months sourcing, they're burning a couple of weeks sourcing. And they find the right person that says, you think you need a big consultancy for three months, you need me for 10 hours, and. And then they can just do that over and over again and make their own career. There should be a career. And it's not the gig economy, it's our current economy, a career and doing what you're good at for lots of different people. It's hard to buy a house with that. So you need to have a platform, so you need to be able to do transactions that are bigger dollars from more backable employers. And you need to be able to do a lot of it consistently. And a bank has to be able to see that opportunity and be confident. And then same thing with upskilling education. You want laser precise upskilling education that when you're done your hourly rate's going to double and you know it. So. And it's a small amount of education, not like four years. So Fulcrum's in the middle of all of that. And that's always been their vision. But it took a long time to figure out what the biggest companies will buy today. And now we're figuring out how to take that horse to water to the water. I just described that Trevor describes, that Sean describes and it's going to take a while but you know, they're doing it starting at the top. And when you look at the gig economy today, most of the companies on upwork are not the companies like I'm talking about. Right. At least not in any kind of scale. So if we can unlock those companies to be more flexible in the way they think about staffing and even internal staff allocation, like we're moving aggressively into basically fractionalizing internal workers to focus on their passions and skills anyway. So that's what that looks like.

Very cool. Love seeing that. It's obviously a huge passion of mine for tapping into upskilling and reskilling which I think even. Let's talk San Diego for just a quick second. Like that is our potential future as well too. So much non tech talent that could be upskilled and reskilled and with housing prices the way they are, it would behoove a lot of people to take their non tech sales role and sell software and maybe make double the money. Anyway, off my rant there.

But no, I love it.

I love what they're, that they're building that here and the huge impact that.

Potential and they will be announcing at some point when we all get around to it. But part of great scale's model and part of the model of any company is to go attract mainline venture capital. They've accomplished that. Nice mainline venture capitalist is doing their round, has done their round. We just again, and I don't want to like blow any for Trevor and Sean to go out and celebrate and all that, but they were the, they were, yeah, we'll call it graduating. But as far as like the idea that this incubator VC thing can take a company through to series A, we get to check the box because of that. So that was huge, huge proof point for the model. And it's been interesting seeing how the great scale thing works with the new venture investors thing and it's going really?

Well that's great. Well, we need to have them on the podcast. They're long overdue. But it sounds like it's a good time coming up so we'll make sure that happens. You incubated three companies. It sounded like you, you yourself graduated to a new phase of the venture capital firm. Like take us through kind of where you are today and what's coming up. What are we expecting over the next year?

Yeah, so gradescale itself as a firm is. Yeah, we're looking at what growth looks like. We know that this model is worth repeating quite a few times against anything that sounds like tech that I'll say manipulates because that's engineering wise how I think about it, but manipulates people into being healthier, wealthier or wiser or all three. The more the merrier. And there's a lot of work to be done in those areas everywhere from mental health improvement to kind of better converging some of these markets so that various kinds of individual passions can turn into sustainable careers and even small independent businesses that self scale as tech. You have everything from life coaches to people that are video game developers. So one of our companies, vols helps life coaches and fitness coaches and book writers turn into a self scaling online coaching business that their hour, they don't spend more hours but they can impact more people through automated nudge messaging based systems that create a lot more tangible value for the consumer to pay for. And then at plus music it's game developers and musicians partnering to build amazing music enabled games at scale that are just way cooler and it's more fun. And both of those and musicians, especially independent ones go to work and they come home and they spend their time income on music stuff. It should be that their art goes out there and pays them. And the game developers, the small independent game developers, they go out, they go to work and then they come home and they spend their income on making video games that you can play on your mobile phone. We want them to be able to just let their amazing video games go out and pay them. So and then the people that are enjoying these games to just love them and have these backstories of amazing entrepreneurs on both the music and the game development side to power the why of it. What a great picture. So there's a lot of companies that should exist in healthcare and some other areas that we want to get around to. And when I say we want to get around to, we're really kind of building an institution. I personally CTO most of our companies and I'm really leaning hard into that. Aaron is very much more about scaling up the fund. And so I'm like laying the examples down and he's systematizing the examples and scaling up the fund. We might attract and we're always interested in attracting partners to help scale the fund and also then help scale our services capability. So one of the things that's unique about us, we actually hire many of our engineers, product managers and other people into the fund and then our companies consume them at cost. So that's not everything and it's not all the time. It's a good way to bootstrap or quickly start something up. And that's been really effective at speed to market and capital conservation as well as attracting much better talent because we get super senior people from all over the world that like the idea of working on many projects with heart. So that's been pretty fascinating as a, like a spark lighter. But then the companies immediately work our people out of a job.

Yeah.

So we're scaling that side up too. So there's enough here to where it's as far as you know me, I'm really into the companies that we're long into and we've figured out how to scale up the institution kind of independent of that and raising more capital to accomplish that is part of it. We don't exactly know how much it's going to be next time that we raise. We don't know exactly how thematic it'll be like by targeted area. But we can do two more companies a year without me even getting involved as an example. So we probably should. And then also more importantly, we want to keep being a major investor, if not lead for the later rounds. We want to objectively compete with series A term sheets and series B lead term sheets because those are the times when the companies shift from what their good intention was to like hyper growth.

As a necessity, like double down.

And that's okay. Like we've learned actually with actually we have two, two companies that will be announcing institutional investment rounds in we, we have answered the question that we can attract institutional VCs that actually believe what we believe and are not just putting in capital to compound accelerated growth that drives valuation arbitrage. But we want to hold the market accountable to that by saying, hey, we'd love to have outside VCs come in and lead this stuff, but if we don't, if the founders don't like that vc but for the money, we'll provide the money. Our limited partners are very excited about that. But it does mean that we might be starting to write much bigger checks. So far we're, we're, I don't know call it a million million five into the comp each company and we just kind of sequentially start small and get bigger every time. But the, the next rounds even just to keep our pro rata it might be a three or $4 million check and then a $10 million check. So the bigger fund is going to be a combination of continuing to follow on that story. We'd love to be there in IPO and we'd love to hold on to the post IPO shares by the way because we're so confident in the sustainable value that we've created. Yep. And we also want to be there to, to, to launch some of these new ones to take advantage of all the lessons that, that we've laid down together.

Yeah.

And we'd love our founders to get wealthy and reinvest in the fund.

That's a super sustainable model. Love to hear it. I will say from like let's call it not necessarily a studio but there's a studio esque venture studio model here. And sometimes you find other examples where the entrepreneur says you know I had a success in one, be great to start four. I'll advise and mentor all them. And when they sit around and say who's the best person to lead this first one? Hmm. You know, it's me. And then they jump in and they become CEO the first one. It sounds like you firewalled yourselves from this.

Right.

You only you're not incubating your own ideas per se. You're talent first to then help propel them. Correct.

I know what you're talking about and I've seen it happen. There's a few things that have occurred through our learning of just doing this one is we and our founders are not smarter than the actual market. So the original idea is almost meaningless. Instead it's the tenacity and the persistence of the team to address the market and obsess about finding real and true customer value creation and why those customers and roughly what shape is the solution is derived by what the founders care about. And Fulcrum founders care about employment and life quality as a result of employment health plus music founders care about musicians and their quality of life through musician financial health and artistic expression. The founders of Volve care about individual humans getting the real deal information that changes their physical and mental life for the better. So like that's what they care about. And the products and the specific market have jostled around Always trying to find the best way that we can create that value. So I, we just know. Aaron and I both know we have no fricking idea. Neither did our founders what was going to work. So when we dream up ideas, it's like, am I really going to be the one to go take the hill? Do I really like getting on the sales road? Do we like doing the pitch thing? Do we want to like nurture these employees day in and day out? It's so much more fun to nurture founding teams than to brute force nurture a team that you're growing on a schedule. Like which happens when there's a lot of capital involved. And that's a hard row to hoe hoed the row. So is Aaron multiple times. So I'm like, well. And we see our founders go through it. So it's really enjoyable to see them work so hard and have so many competing, heartfelt problems to solve and to be able to come in and just help them not feel alone and to be able to help them through those decisions. And also it's really amazing to see how much smarter they are than we are about whatever we were thinking about. And it's very comforting to know that we get to turn right around. Imagine thesis on like a monthly succession at the grayscale level and say what does this mean to why? Why more funders? What might the next company kind of sound like? But it's really a founder activity, a pitch iteration activity, a test, the market activity. That's why our first check, our first 12 months. We pay for the first 12 months. The founder should have a salary. They get one and 12 months. Go figure something out. So that it just, it's not that we firewalled ourselves. It's just we're so convinced.

Yeah.

That no company knows what it's going to be until roughly a couple million in revenue is consistently coming in. And the last 10 sales were not where everyone were. Like, yeah, that's one of those. And there's a system. Anything before that, it's just an adventure.

Totally. It's chips on a table for sure.

And seeing these people be able to create so much wealth and us to be large enough on the cap table that we get some too. But just, God, it's great. It's addictive to watch that journey happen.

Totally. Well, a good place to meet those founders initially is over tacos. And luckily we have an abundance of those places, especially in coastal north county, where I believe you are as well too.

Aaron is. I'm actually in north park now.

Oh, you're in north park now.

But now I'm in North Park.

Oh. So the taco stands are. The Taco Bells are even closer to you. You literally, like.

Yeah, like I tripped. I trip on taco stands.

Exactly. So do you have a favorite? More than one? Maybe one, yeah.

All right, so my absolute favorite taco of all time is the Jack in the Box taco that. Yeah. From 1998. My buddy Dustin Henry at Torrey Pines High School, he loved that stuff. And I wasn't social. I was busy. He made me go be social. He taught me to be a kid. And we'd roll into that Jack in the Box, drive through in reverse and order those tacos, and he's like, these are the best tacos. I'm like, this is. And then I bit into that magic. But I think I was mostly, like, experiencing bodily just his care and love for me. I was. I've been very shocked at specifically city tacos on University Avenue in North park, especially how different city tacos in La Mesa is. Like, they're great, too, like, as a people and as an environment and. But it's almost like that physical food product is essence of city tacos on University in North park, and only on, like, most of the days. I don't know if it's the chef or something, but, man, there's a. There are these times when it's like bazongas, and it's not a specific one. They have anyway.

Like, they have some great tacos, Jackfruit and. Oh, yeah, yeah.

But even, like, their standard ones, so. And then my favorite Mexican place is Casa Machado restaurant at Montgomery Airport. For a long time, it was owned by other people, and we would get food sick poisoning there regularly, but we'd still go anyway. And my wife, whenever I come home from Casa Machado. Oh, you're a Casa Machado. You come away smelling like you took a bath in the kitchen in the grease vat. But where else can you go sit around airplanes and have tacos? And the staff there is amazing. So check it out. They don't make you sick anymore. It actually tastes okay.

All right, we're going to. Now we'll fly in for a meal. Maybe you can fly from Palomar to Montgomery there. There you go. Those are good ones. I don't think. No. City tacos is definitely in the taco database for sure, though. Most people mentioned the Encinitas one, I think, actually, which probably has a whole different day of the week, that they're maybe good or better on as well too.

Yeah, I don't. I swear they put. They're sprinkling something illegal in that sometimes. It's just amazing.

So good. Well, Tyson, it's awesome to have you on. We'll give a shout out to Aaron that we missed him, but, you know, maybe in the future we get you both on, talk about the next phase. But this is just. We're so incredibly impressed and excited for what you guys are doing and building great companies, which is what it's all about, right?

Yeah, Neil. And thank you. I really got to thank you. I've been in this ecosystem forever, like I said, backed by Tech coast and a whole bunch of angels in town and some venture capitalists that were here, was on the board of Connect and did the springboard thing. I was a Founders Institute mentor down here in San Diego for a lot of years. What you've done to just kind of personalize the community, keep track of it, make, you know, be caring about what's here, I think it's really valuable and you build wonderful community for all of us. And we really appreciate it.

I very much appreciate that too. And thanks for everything you've given back to the community as well. That, you know, like all whole thing, all that matters is that we build good companies.

Yeah.

And if we do that, everything else is kind of gravy on top of it as well too.

So everything else is cheese on the taco.

Exactly. Well, thanks, Tyson. Appreciate you being on the Pod.

Thanks.

Thanks for tuning in to the Tacos and Tech podcast. You can find all of our episodes on freshbridtech.com as well as on Twitter at Tacos and Tech Pod. Also follow Fresh Breedtech on all of our social platforms and make sure to share and give a review on Apple Podcasts, Spotify or Google Play. Thanks again.

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